The Orange County Board of Commissioners wrapped up next year’s budget planning this week with a $911,385 increase in school funding and more money for local agencies.
The roughly $206.8 million budget, to be approved Tuesday, would give county employees a 2 percent raise. It includes $9.8 million from the county’s fund balance – the money left at the end of a budget year – but it does not increase the property tax rate.
The county’s tax rate is 87.8 cents per $100 in property value, generating a $2,634 tax bill for the owner of property valued at $300,000. Chapel Hill, Carrboro and Hillsborough set their own property taxes (See sidebar for details).
County Manager Bonnie Hammersley had budgeted an extra $1 million to education this year. The commissioners, after discussing budget concerns for more than five hours Thursday night, added $400,000 from the county’s reserve fund – set aside for unexpected future costs – and $511,385 from the fund balance.
The result was a $146 increase in per-student spending next year, to $3,697.50. The Orange County Schools would get roughly $28.5 million in local operating money; the Chapel Hill-Carrboro City Schools would get about $45.3 million.
The increase exceeded what the county schools were seeking but funded only 48 percent of the city schools’ requested increase.
The Chapel Hill-Carrboro system will have to find at least $500,000 in budget cuts, said Todd Lofrese, the district’s assistant superintendent for support services. The final number is a “moving target” that won’t be known until the state finishes its budget, he said.
Local budgets have been buoyed this year by growing property and sales tax revenues. That could change, local officials warn, based on pending state legislation that would change how tax revenues are distributed.
The commissioners avoided increasing the county’s property tax rate and a special school district tax levied on Chapel Hill and Carrboro residents.
The county has strongly supported schools in the face of both deep and still unknown state funding cuts, Commissioners Chairman Earl McKee said. Using reserve funds is a concern, because “it’s very easy to keep going back to that well,” he said, and reliance on the fund balance is not sustainable.
Tax increases are likely in the next few years, he said, regardless of whether voters approve a $125 million school renovation bond. The bond, slated for a November 2016 vote, could add up to five cents to the county’s tax rate.
“It’s irrelevant whether we do it through a bond or do regular financing; we’re going to have to do it,” McKee said. “And we’ll have to raise taxes to do that. I’m glad to hear we’re talking about holding the line on taxes this year.”
Towns setting 2015-16 budgets
Carrboro, Chapel Hill and Hillsborough also are finishing their 2015-16 budgets, which go into effect July 1. Town residents pay local property taxes, plus the county’s 87.8-cent property tax rate. Carrboro and Chapel Hill property owners also pay a school district tax of 20.84 cents per $100 in property value.
Budget highlights include:
The Carrboro Board of Aldermen could adopt a $21.6 million operating budget Tuesday that is balanced with $176,945 from the town’s fund balance.
Another $1.2 million from the fund balance would pay for parks and recreation projects, to upgrade fire and police radios, buy police body cameras and help fund a Rogers Road sewer project. All employees would receive a 2 percent raise.
The proposed budget maintains the town’s 58.94-cent tax rate per $100 in property value. The town tax bill for property valued at $300,000 would be $1,768.20.
The Town Council approved this week a $100.7 million budget that maintains Chapel Hill’s property tax rate but adds $1.40 to the annual stormwater fee.
The higher fee – $26.15 for every 1,000 square feet of impervious surface, such as driveways and roofs – will help pay for townwide planning and projects.
Chapel Hill’s property tax rate will stay 52.4 cents for every $100 in assessed value, generating a $1,542 town tax bill for the owner of property valued at $300,000.
The budget uses roughly $2.6 million from the fund balance and gives town employees a 2 percent raise in July and another 2 percent raise in January.
The Board of Commissioners adopted a $9.2 million operating budget this week using nearly $1.3 million from Hillsborough’s fund balance. The board also approved a $10.4 million budget for water and sewer operating expenses.
The tax rate will remain 68 cents per $100 in property tax value, generating a $2,040 town tax bill for the owner of property valued at $300,000. The budget also adds 8.8 percent to the cost of sewer services, making it 98 cents for every 1,000 gallons an in-town customer uses and $1.91 for out-of-town customers.
Water service charges will remain the same.